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De-location, the new relocation?

Wade Foster, CEO of the automation software company Zapier, announced last week that they will be offering $10,000 to any employees who want to leave the Bay Area and continue working for the company elsewhere.

In his post, Foster explained the rationale behind this initiative, which seems to be the first of its kind:

Some of us fall in love with the area and are financially able to make this home. But for the rest of us, it can be a real challenge to turn the Bay Area into a life-long home rather than a short stop somewhere in our twenties and thirties. The housing crunch and high cost of living simply price out many families and, despite loving the area, the realities are many of us need to look elsewhere to create the life we want for our families.

Zapier seems to be addressing a problem that is increasingly facing young professionals in the Bay Area: the burning desire to work in the tech industry, but the economic inability to live where the majority of those jobs exist. Tech companies have taken a lot of the blame for the recent hikes in San Francisco and Silicon Valley rent prices, but the fact is turning out to be that their employees can barely afford to live here themselves. Last year, engineers at Facebook went directly to Mark Zuckerberg himself to ask if the company would subsidize some of their housing expenses due to their surprising inability to make ends meet. This sentiment has been shared by employees of many of the Bay Area’s major tech employers, including Twitter, Apple and more.

In 2015, our friends at Radpad and Anthology conducted a study to find out how much of their salaries Bay Area employees were spending on rent, and this is what they found:

Experts recommend spending about 30% of your income on rent.

These numbers are not only well over the recommended 30%, but they’re also based on salary data for mid-to-senior-level engineers who make well into the $100,000’s per year, according to the same study. For context, the average American household income in 2016 was around $50,000 and the average entry-to-mid-level salary in the Bay Area was between $70-90,000.

Being that Zapier’s employees are 100% remote and they don’t have an official HQ, this experiment makes perfect sense for them, and I have a feeling it will take off. With an increasing number of inhabitants leaving the Bay Area — not to mention California in general — and a decreasing number of new residents moving in, the time couldn’t be more perfect. Plus, not only are they offering this $10,000 in relocation assistance to current employees, but they’re also offering it to new hires who are looking for both a new opportunity and a more affordable place to live. For those with flexibility who have either been in San Francisco for 5 months or 5 years, a Bay Area job and a St. Louis or Austin rent check could actually be a pretty attractive offer.